This is not a repeat of a previously written Wells Fargo blog; the company has once again been accused of unethical behavior. This time it’s an auto insurance scam, backed with a class action lawsuit.
We can all well remember in 2015-2016 when the bank employees, forced to meet sales goals “created” more than 2 million unsanctioned customer accounts. That scam cost the bank, or I should more correctly state, their shareholders millions of dollars in fines.
In the latest scam, Wells Fargo has been charged with fraud and racketeering after it has admitted to ripping off more than 500,000 borrowers for vehicle insurance they did not ask for and did not need! As if that weren’t enough, when the borrowers didn’t pay the premiums because they had no idea of what they were, they were charged with delinquency fees!
A class action law suit has been filed in San Francisco. Will Wells Fargo never learn? Car insurance scam.
The Confession
In late July 2017, Wells Fargo conceded to the fraud. They said they would refund nearly $80 million back to the more than half million customers who were charged for insurance they never ordered between 2012 and 2017!
The bank made their confession following a New York Times piece reporting on an internally distributed document for high-level bank executives that detailed the illegal insurance premium charges.
In its concession that it had charged the premiums the bank effectively said that it was stopping the charges due to customer concerns. This could possibly be the most outrageous and arrogant statement that Wells Fargo has made to date.
Roland Tellis, the lawyer for the customers in the class action suit has made the following statement:
“Wells Fargo has long lost the right to decide what is best for its customers. Refunds don’t address the fraud or inflated premiums, the delinquency charges, and the late fees. It will be up to a jury or court to decide the appropriate remedy.”
He is absolutely correct. The bank has repeatedly engaged in unethical behavior but the core reasons for the behavior – and the executives behind those reasons have not felt any legal consequences for their actions. In fact, the only statement to date that the bank has made in regard to the lawsuit is as follows:
“We are very sorry for the inconvenience this caused impacted customers and we are in the process of notifying them and making things right.”
Making things, right?
Paul Hancock is neither a lawyer nor a lobbyist, just a marketing guy from Indianapolis who got slammed to the tune of $600 for car insurance he never needed. He told Wells Fargo of that fact – repeatedly. They were too arrogant to care. Not only didn’t they listen to him, they started charging him late fees. He did the noble thing and started a lawsuit. A lot of others are joining his lawsuit and apparently, in some of the states that Wells Fargo reaches, any expenses put out by the customers can have treble damages.
But even that is not the point.
With all due respect (and I must admit there is little left), it is well past time for Wells Fargo – and its executives to be held personally responsible for these unethical behaviors. In the case of more than a half-million customers getting charged for insurance they never requested, someone or some group of executives authorized this strategy. Ethically, they should be held responsible, and the criminal charges should be theirs to face.
The concept of the bank “making things right,” far exceeds the ludicrous and goes fully into the realm of arrogance. Wells Fargo executives authorized and caused this scam. In my opinion, the best way to make things right might be through resignations, terminations and criminal charges. To re-state an earlier point in a different way, when the lawsuit is settled and fines are assessed, it ultimately manifests itself on stock price and individual shareholders. The executives themselves, are untouched. In this case, those bringing the suit should go after management. They are the culprits.
When there is an absence of ethical behavior and indeed, ethics training, scams of this type are the end result. This lawsuit may not be the last against Wells Fargo for indeed, there is no reason for them to stop. Every choice has a consequence, that is true, but when the management is never penalized there is no need for them to worry as to what those consequences might be. Will Wells Fargo never learn? Car insurance scam
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